This article is part of State of Health, a series about how Michigan communities are rising to address health challenges. It is made possible with funding from the Michigan Health Endowment Fund.
Oakland County Commissioner Charlie Cavell knows medical debt all too well, as he shared during an
October 2023 press conference on the county's plan for paying off residents' medical debt. About 10 years ago, during a mission trip to Haiti, Cavell was infected with giardia. Because he had no health insurance, he decided to fly home to Detroit, rest up, drink lots of Pedialyte, and recover. But during a layover in a Florida airport, he passed out.
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Charlie Cavell.
"The first question I was asked was what my name and address was and if I had health insurance. And even with a 105-degree fever, I knew better than to tell them the truth," Cavell said. "So I told them I didn't have my ID with me, and that I was totally insured, and that I lived in Chicago — try and look me up."
Unfortunately, hospital staff had found his wallet. Because of the $6,000 in medical debt he incurred during his overnight visit, Cavell ended up living in an apartment with no credit check, a month-to-month lease, and bed bugs. He didn't own his first car until he was 28 because the medical debt had ruined his credit. He had to use a pay-as-you-go phone plan. When he met his wife, the couple used her credit score to get a new apartment.
"You know, there's lots of ripple effects of medical debt," Cavell said. "I am a unique case because I didn't happen to have health insurance. But … the vast majority of these folks in Oakland County that are facing medical debt they cannot afford to pay off are people with health insurance and jobs."
Up to 80,000 Oakland County residents will be spared similar tribulations thanks to the county's new collaboration with New York nonprofit
RIP Medical Debt, which buys medical debt for pennies on the dollar. Using $2 million in federal American Rescue Plan Act funds, the county hopes to pay off about $200 million in medical debt. While the initiative is a groundbreaking boon to many in Oakland County, it also highlights the overwhelming burden of medical debt for countless others in Michigan and beyond.
"I think it's a wonderful charitable act. I am not sure it's going to fix the main problem in our society, which is that health care costs patients too much money," says Dr. Nora Becker, assistant professor, researcher, and primary care and internal medicine specialist with
Michigan Medicine. "I am of the opinion that health care should be affordable for people, and that they should not be financially harmed by receiving needed medical care."
Becker notes that medical debt harms families in many ways — and medical debt in collection is only the tip of the iceberg. Millions of American families struggle to pay their medical bills and, as a result, diminish their quality of life.
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Dr. Nora Becker.
"What you don't see in those [medical debt] numbers is the money people did pay for their medical care, that they may have managed to pay, but it doesn't mean that it didn't do them financial harm," Becker says. "Erasing that tip-of-the-iceberg problem also hides the fact that needed medical care for many Americans is still more than they can afford to pay."
Medical debt also drives millions of Americans into homelessness. In September 2023,
a survey by the Kaiser Family Foundation and NPR reported that approximately one in five of the 100 million Americans with medical debt had to change their living situation, for example, move in with friends or family.
"This is a problem that tends to affect some parts of the population more than others. And the population that I really worry about are the low-income, commercially insured," Becker says. "If you're enrolled in Medicaid, your out-of-pocket costs for the care that you get are very low or zero. I really worry about our low-income people in high-deductible health plans. We know that's been an increasing segment of the population as high-deductible health plans become more popular among employers and insurance companies."
Medical debt takes a toll on Michigan's children
According to Matt Gillard, president and CEO of Lansing nonprofit
Michigan's Children, Michigan does a good job of providing health care coverage to children in families with low to moderate incomes. Even so, medical debt accrued by the adults in those families impacts their children. With working families struggling to make ends meet, any sort of debt increases problems for families.
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Matt Gillard.
"What we see in Michigan, and probably in all states around the country, is low- to moderate-income working families struggling with all kinds of debt, medical debt included," Gillard says. "If a family is struggling already to make ends meet with the cost of child care, inflationary costs increasing for food, and other things, any sort of debt adds another burden."
Gillard would like to see more counties — and even the state or nation as a whole — follow Oakland County's example, especially when medical debt pay-offs can cost pennies on the dollar.
"I think that there's a lot of promise with this idea. I'm anxious to see what happens in Oakland County. And I'm anxious to see if there's more conversations at the state level and some interest from the governor in pursuing this," Gillard says. "We at Michigan's Children would want to make sure that it's prioritizing families with children, families with young children in particular, who we know are most burdened by economic challenges."
"The system is really broken overall."
Allison Sesso, president and CEO of RIP Medical Debt, says RIP Medical Debt hopes to erase medical debt in other Michigan communities. She says Kalamazoo County approved a 2024 budget that earmarks
$500,000 to erase $89 million in medical debt — and RIP Medical Debt staff are in talks with other communities in the state.
"Medical debt is itself a social determinant of health, meaning that it undermines people's health and wellbeing. And I think it flies in the face of what doctors and hospitals are really hoping to achieve," Sesso says. "It's sort of this counter-influence on people's health, what you need to pay oftentimes to get access to health care."
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Allison Sesso.
Sesso notes that medical debt leads to people skipping necessary health care, eating less healthy food, and working more hours. They may borrow money from friends and family, which can undermine relationships and create even more stress.
"There's obviously a real mental health burden on individuals as well because they feel like they're failing personally when they have medical debt that they can't afford," she says.
To avoid medical debt, Sesso advises people to get the best health insurance coverage they can afford and to research hospitals' financial assistance policies and programs, which are required by law. Last but not least, she warns against putting medical debts on a credit card — even those offered by health care providers.
"People should think really carefully about signing up for payment plans, which oftentimes providers will encourage people to get on. Those can be tricky. You should read the fine print and make sure that you can afford what you're signing up for long-term," Sesso says. "You know, the system is really broken overall. So, unfortunately, avoiding medical debt is not easy to do. I think it's unfair to put that burden on individuals."
Estelle Slootmaker is a working writer focusing on journalism, book editing, communications, poetry, and children's books. You can contact her at Estelle.Slootmaker@gmail.com or www.constellations.biz.
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